Problem 1. BJ Manufacturing Company uses Job Order Costing system to accumulate production costs. At the beginning of the year, the balances of the inventory accounts are as follows: P168,000 210,000 Raw Materials Inventory Work in Process Inventory Job 101.. Job 102 Finished Goods Inventory Job 005 Job 006 P105,000 105,000 182,000 P 85,000 97,000 The summaries of transactions for the year are as follows: (a) Raw Materials costing P826,000 were purchased on account. (b) Materials issued to production, P785,000 distributed as follows: Job 101 Job 102 P125,000 Indirect P150,000 Job 104 P205,000 P95,000 P180,000 Job 103 balance Job 105 (c) Heat, light and power, factory plant, for the year was P116,000. (d) Depreciation for factory plant for the year, P190,000 (e) Marketing and administrative expenses, P250,000 (f) Production wages for the year was P1,250,000 of which 20% is for indirect laborers. The direct wages were distributed as: Job 101, 15%; Job 102, 20%; Job 103, 25%; Job 104, 30%; Job 105, 10%; (g) Employers' share for SSS, Medicare and Pag-ibig were based on the latest contributions mandated by law. (h) 80% of direct labor cost was applied as overhead to the jobs. () Advertising costs for the year was P56,000 ) Expired insurance was P50,000 of which, 80% is for the factory. (k) The finished goods stock at the beginning of the year were sold on account at cost plus 40% mark up () Miscellaneous factory overhead costs incurred were P500,000. (m) Job 105 was unfinished at the end of the year. Jobs 103 and 104 were delivered to the customer at cost plus 40% mark up on cost.
Problem 1. BJ Manufacturing Company uses Job Order Costing system to accumulate production costs. At the beginning of the year, the balances of the inventory accounts are as follows: P168,000 210,000 Raw Materials Inventory Work in Process Inventory Job 101.. Job 102 Finished Goods Inventory Job 005 Job 006 P105,000 105,000 182,000 P 85,000 97,000 The summaries of transactions for the year are as follows: (a) Raw Materials costing P826,000 were purchased on account. (b) Materials issued to production, P785,000 distributed as follows: Job 101 Job 102 P125,000 Indirect P150,000 Job 104 P205,000 P95,000 P180,000 Job 103 balance Job 105 (c) Heat, light and power, factory plant, for the year was P116,000. (d) Depreciation for factory plant for the year, P190,000 (e) Marketing and administrative expenses, P250,000 (f) Production wages for the year was P1,250,000 of which 20% is for indirect laborers. The direct wages were distributed as: Job 101, 15%; Job 102, 20%; Job 103, 25%; Job 104, 30%; Job 105, 10%; (g) Employers' share for SSS, Medicare and Pag-ibig were based on the latest contributions mandated by law. (h) 80% of direct labor cost was applied as overhead to the jobs. () Advertising costs for the year was P56,000 ) Expired insurance was P50,000 of which, 80% is for the factory. (k) The finished goods stock at the beginning of the year were sold on account at cost plus 40% mark up () Miscellaneous factory overhead costs incurred were P500,000. (m) Job 105 was unfinished at the end of the year. Jobs 103 and 104 were delivered to the customer at cost plus 40% mark up on cost.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare the T-Accounts for Raw Materials Inventory, Work in process Inventory, and Finished Goods Inventory. Show where did the values came from.
Transcribed Image Text:Problem 1. BJ Manufacturing Company uses Job Order Costing system to accumulate
production costs. At the beginning of the year, the balances of the inventory accounts
are as follows:
P168,000
210,000
Raw Materials Inventory
Work in Process Inventory
Job 101..
Job 102.
Finished Goods Inventory
Job 005
Job 006
P105,000
105,000
182,000
P 85,000
97,000
The summaries of transactions for the year are as follows:
(a) Raw Materials costing P826,000 were purchased on account.
(b) Materials issued to production, P785,000 distributed as follows:
Job 101
Job 102
Indirect
P180,000
P125,000
balance
P150,000
P205,000
P95,000
Job 103
Job 104
Job 105
(c) Heat, light and power, factory plant, for the year was P116,000.
(d) Depreciation for factory plant for the year, P190,000
(e) Marketing and administrative expenses, P250,000
(f) Production wages for the year was P1,250,000 of which 20% is for indirect laborers.
The direct wages were distributed as:
Job 101, 15%; Job 102, 20%; Job 103, 25%; Job 104, 30%; Job 105, 10%;
(g) Employers' share for SSS, Medicare and Pag-ibig were based on the latest
contributions mandated by law.
(h) 80% of direct labor cost was applied as overhead to the jobs.
(1) Advertising costs for the year was P56,000
) Expired insurance was P50,000 of which, 80% is for the factory.
(k) The finished goods stock at the beginning of the year were sold on account at cost
plus 40% mark up
(1) Miscellaneous factory overhead costs incurred were P500,000.
(m) Job 105 was unfinished at the end of the year. Jobs 103 and 104 were delivered to
the customer at cost plus 40% mark up on cost.
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